After the Hurricane: What You Need to Know About Insurance

Insurance: it's the product everybody needs and nobody wants to use. But in the wake of Hurricane Katrina, plenty of people are going to have to.

"Good Morning America" consumer correspondent Elisabeth Leamy untangles some of the myths and mysteries about insurance.

Homeowner's Insurance vs. Flood Insurance

The general rule of thumb is that falling water is covered by homeowner's insurance, but for rising water you have to have flood insurance. So if your roof blows off and rain falls in, that's a homeowner's insurance issue. But if the creek swells and water floods into your home, you need flood insurance, and there's a 30-day waiting period to get it.

If rain ruins your antiques or other valuables, are they covered by homeowner's insurance?

No. High-value items like antiques, artwork, jewelry and furs are not covered by a standard homeowner's policy. You have to get those items appraised and get a special rider to cover them. It costs a dollar or two for every $100 worth of valuables

If your tree falls on your neighbor's house, whose insurance pays?

Your neighbor's insurance covers it because it's damage to their property, no matter where the damage came from.

What if your car gets damaged while it's parked in your garage? Do you file a claim with your homeowner's insurance or your car insurance?

Your car insurance covers it, but only if you have comprehensive coverage. That's for damage from fire, falling objects and so on. Keep in mind that many people with older cars choose to save money by not buying comprehensive coverage. They basically decide their car is not worth fixing, and they will have to pay out of their own pocket to repair or replace their vehicles.

Only 20 percent to 30 percent of people who rent a home or apartment have renter's insurance. Is it worth it?

Many renters assume that their landlord's policy will cover them. Not true. The landlord's policy only covers the building. Your belongings are totally vulnerable unless you get renter's insurance. A typical policy only costs between $75 and $225 a year, so it's well worth it.

Whatever kind of insurance you have, should you definitely be tapping into your policies if you've suffered damage?

No. If the damage is just a little bit over your deductible, you should go ahead and pay for it yourself. Insurance companies track how many claims you make, and if you make two or three they will drop you. Save your policy for really catastrophic situations.